The battle for AI is fueled by Nvidia

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Nvidia is emerging as one of the top beneficiaries of the AI battle between the software giants, with the chip maker becoming the most valuable company in the world by market capitalization,writes eToro analyst for Romania, Bogdan Maioreanu.

It reached about 3.34 trillion dollars on Wednesday surpassing Microsoft ($3.32 trillion) and Apple ($3.29 trillion). The fourth is Alphabet with a value below $2.18 trillion, followed by Amazon ($1.9 trillion).

The first company in the standings that is not involved in the computer technology sector is the oil giant Saudi Aramco with $1.79 trillion value. The most held stock by global and Romanian investors on the eToro platform, Tesla, is currently 13th in the world with a market cap of about $590 billion.

The fact that Nvidia became the most valuable company in the world is not a fluke. In fact, all companies in the first 5 places are developing some kind of an AI language, product, app or hardware. But Nvidia is the engine that powers AI development. Some analysts say that it controls more than 80% of the market for the graphics chips used in AI systems and data centers. And the rush for the most useful AI is still at the beginning, needing new chips and processing capacities.

Artificial Intelligence has certainly moved to the top of the CEOs agenda. Two-thirds of the executives believe it will take at least two years for artificial and generative intelligence to move beyond excitement, according to a Boston Consulting Group study. All this research will need processing power favoring chip manufacturers, Nvidia included.

Generative artificial intelligence has spawned a world of new business opportunities – and CEOs are eager to take advantage of them. Almost three quarters (71%) of leaders surveyed by BCG say they plan to increase their company’s technology investments this year, and an even higher percentage (85%) say they will increase their spending on AI and Generative AI in 2024. The poll also reveals that 89% of executives rank AI and Generative AI among their top three technology priorities for 2024 and 54% expect AI to generate cost savings. Of these, about half anticipate cost savings of more than 10%, mainly through increased productivity in operations, customer service and IT.

The same study shows that organizations that plan to invest more than $50 million in AI/GenAI next year are 1.3 times as likely as their peers to expect cost savings and 1.5 times as likely to anticipate more than 10% in cost savings. And this is key for continuous AI development, to show how useful it can be to businesses and how it can impact the global economy.

The increase in Nvidia stock price is coming from the increased interest of investors in the AI field, with the understanding that the company stands to benefit from investments being made around the world in the new technology. Investors are thus attracted by the prospects offered by artificial intelligence but also by the potential earnings growth according to the latest eToro Retail Investor Beat survey. And Nvidia is offering both.


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